Israel and Hamas stepped back from the brink in the nick of time, and ostensibly everyone is happy. Which doesn't say much at such a volatile time.

On Sunday we were facing threats of war in the south. By Wednesday, the story of the unfolding indictment against Foreign Minister Avigdor Lieberman pushed Gaza to the back of our minds. It's a ritual Israel and Hamas have been conducting for years, increasingly so in the past two months: an incident with casualties, a blaring response, escalation, threats of war, and finally both sides backing down quickly and quietly a moment before the collision.

No Israeli prime minister would launch a war while students are on Passover vacation (Ariel Sharon embarked on Operation Defensive Shield during Passover 2002 only due to the horrific massacre at the Park Hotel in Netanya ). Hamas, amid the reconstruction after Operation Cast Lead and improving relations with Egypt, does not want this either. Still, everyone understands that had last Thursday's anti-tank rocket hit a bus full of schoolchildren, as opposed to critically injuring only one teen, it would have been hard to stop a war. Every such round - starting, stopping, a lull, and then starting again - gradually wears down the brakes.

On Nakba Day in mid-May, when Palestinians commemorate their "catastrophe," the Palestinian Authority is planning to stage mass marches to settlements and army checkpoints. A big aid flotilla to the Gaza Strip is expected at the end of that month. And in September, a diplomatic crisis looms should the Palestinians declare independence as planned.

The new Israel Defense Forces chief of staff, Maj. Gen. Benny Gantz, summed up expectations for 2011 by predicting "a worsening security threat and increasing chances of escalation and warfare in more than one arena." Iran, Gantz predicts, will continue its march toward nuclear capacity, and leading the region's radical camp. The IDF will have to prepare for all-out war, knowing the enemy will try to increasingly threaten the home front, both military and civilian, which will be "a second battle front in any scenario." The northern arena, where the Syrian front no longer takes priority over the Lebanese, and where the military invests a large share of its efforts, is the second priority, and the Palestinian arena is only third. The Egyptian border is considered a potential risk, not a threat.

Guaranteed financing

Iron Dome's impressive operational success in intercepting Grad Katuyshas headed for Be'er Sheva and Ashkelon guaranteed the project financing. On Wednesday, as expected, a ministerial committee approved the acquisition of four Iron Dome batteries made by Rafael, in addition to the two already deployed.

There is not much new here, other than the Netanyahu government's ability to leverage the same decision twice. U.S. President Barack Obama promised a year ago to finance these batteries through a special $205-million grant, which Congress approved this week. The committee's decision enables funding to expedite the production of the first of these batteries, which could then be deployed by the end of the year, without the need to wait for the Americans.

But Defense Minister Ehud Barak could not help but recall this week Iron Dome's tortuous journey since his predecessor Amir Peretz approved the project at the beginning of 2007. Few in the political and defense establishments had faith in it. The energetic lobby for the rival approach, a laser-based interception system, invested great effort in convincing decision makers that Iron Dome was useless. The Finance Ministry adamantly objected to the extraordinary expenditure. The General Staff too had reservations about the plan, mainly because it might be funded from the IDF's budget. The previous chief of staff, Gabi Ashkenazi, backed Iron Dome only at a relatively late date.

The air force, as usual, placed the emphasis on offense and regarded the active defense system as a stepchild.

"You call yourselves the 'Israel Air and Space Force,'" Barak said pointedly to the air force top brass. "Space and satellites sound very sexy, but the truth is that you have to be the air force to allow freedom of maneuver to the ground forces, and protect civilians from falling projectiles."

According to Barak, technological systems fall under the "two cubed rule": twice the cost, twice the development time, and half the promised performance. In the case of Iron Dome, he diagnosed a 10-percent surplus in time and cost, and a 90-percent achievement. In the future, Barak believes, Iron Dome's performance could be improved to enable the batteries to take on some of the tasks of Magic Wand, the other Rafael-made system for intercepting longer-range missiles, whose developed is expected to be finished next year - and whose missiles are far more expensive than Iron Dome's. The success of Iron Dome has also paved the way for Magic Wand's approval.

"There is a tremendous psychological aspect to this," Barak told Haaretz. "The moment you understand that something like 85 percent of the rockets that are fired at populated areas won't make it there, you totally alter the citizens' sense of security. If the enemy knows our firepower reaches its target and is far deadlier, whereas most of its firepower - its answer to our military superiority - gets intercepted, it changes the rules of the game. Should war break out, the intercept systems will provide more time for the army to fight and more maneuvering space for the diplomatic campaign."

The Arab side, too, was quick to get past the Gaza events. Al Jazeera and its competitors, the satellite television channels, went back to Egypt and the violence in Syria, Libya and Yemen.

On Wednesday the Egyptian police in Sharm el-Sheikh arrested former president Hosni Mubarak and his sons Ala and Gamal. The mass demonstration in Cairo's Tahrir Square last Friday was not about democracy or free elections, but rather called for the arrest of Mubarak, whom Egyptians hold responsible for their country's sad state.

Surprisingly, it often seems that Egypt's supreme military council sets policy based on the winds blowing from the square, and not based on an orderly plan. Mubarak could have been arrested weeks ago, but the security forces refrained from doing so until they concluded that last week's angry rally, which ended in the death of two protesters, left them no choice.

Syria began the week with violent demonstrations in Damascus, in which one student was killed. The city of Baniyas was placed under siege and a main road nearby was blocked by thousands of women and children, who demanded the release of men arrested in the riots. The images broadcast from Baniyas show local security forces brutally assaulting protesters. Today's demonstrations may prove even more riotous. Bashar Assad's regime is still showing its power, but with increasing reports of Syrian soldiers refusing to shoot at protesters, the president is clearly in trouble.

Hamas leaders in Gaza realize they may soon need to find an alternative to Syrian support. One of the organization's leaders, Mahmoud Zahar, told Haaretz by phone Wednesday, "Hamas wants to preserve the quiet in the region and is not interested in bloodshed, on our side or on the other side."

However, should Israel attack his group or hurt Palestinians without cause, Hamas would react, he said.

GOC Southern Command Tal Russo said Wednesday that, in Hamas, "the tail is wagging the dog." The military arm is doing what it wants, while the political arm seeks calm. Zahar vehemently denied this, claiming that all are committed to Hamas' single policy.

As for the attack on the bright yellow school bus, Zahar claims that the militants who fired the rocket did not know that the bus was used to transport children. "They cannot tell the difference between a soldiers' bus and a school bus. It was a type of accident," he said.

Zahar reiterated: "Everything is up to Israel."

Frustrated

The same day, Wednesday, the Israeli coordinator for negotiations over Gilad Shalit's release, Hagai Hadas, announced he was quitting. Hadas is frustrated by the deadlocked talks and by what seems like the Netanyahu government's unwillingness to increase the pressure on Hamas' military leaders to get a deal moving.

Zahar claims that the German mediator, Gerhard Conrad, suspended his efforts as well. "The government of Israel is not interested in completing the deal," he said.

Hamas considers the bus attack a necessary move, the requisite response to a long series of IDF attacks that made it seem like Israel had changed the rules and neglected to inform Hamas.

At least on the outside, the organization is expressing satisfaction: The senior ranks let off some of the steam building up in the field, and the escalation also stopped in time, before Israeli tanks were sent into the heart of the Gaza Strip.

In Israel, the price Hamas paid is being underscored. More than 20 killed in a wave of attacks from the air, the ground and even the sea over the course of two days. The dead included several senior field commanders, while relatively few non-combatants were hurt. All of the Palestinian attempts to kill Israelis were intercepted by Iron Dome. When the heads of Hamas requested a cease-fire, through the United Nations, Israel responded with "quiet will bring quiet," without any further guarantee. Quiet was indeed restored. Everyone is ostensibly happy. But in a sensitive region like the Gaza border, that is, of course, cold comfort.

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